Coronavirus Pandemic and its Impact on the Economy of India

The Republic of India, as well as other countries in the world, are trying to minimize the damage caused by the coronavirus pandemic. However, it is not an easy task as can be seen from the example of India. The world’s second-most populous country is struggling to cope with the economic impact of the coronavirus pandemic. Moreover, the number of cases continues to increase and this is a serious challenge for the country’s economy.

Currently, India is the fourth worst-hit nation in the world. The total number of cases surpassed 333,000. The U.S. has the highest number of infections with more than 1,174,000 active cases. In the second place is Brazil and in the third place is the Russian Federation.

Unfortunately, the daily reported cases in the country hovered near, and sometimes exceeded, 10,000 per day over the last several days. Moreover, high infection rates also make India the worst-affected country in Asia. Russia, which has the third-highest number of cases, is technically part of both Europe and Asia. Moreover, most of its major cities are located in the European part of the country. As a reminder, Russia has more than 537,000 cases.

It is also worth mentioning that the city of Delhi has become a hotspot for the virus. People are struggling to get a hospital bed due to the number of patients. According to the deputy chief minister for Delhi, the number of new cases in the city is expected to grow to 550,000 by the end of July.

Local economy and strict lockdown

Importantly, the number of infections continues to rise despite the strick lockdown that began in late March. India finally lifted those measures at the end of May. However, some states and regions have restrictions in place to contain the virus.

Moreover, authorities divided many districts into low-risk and high-risk zones. Hopefully, in low-risk zones, economic activity is resuming slowly, but in the high-risk zones, economic activity remains restricted.

Restrictions imposed by the government grounded economic activity around the country. Moreover, the gross domestic product (GDP) grew by 3.1% in the first three months. This was the worst result in at least 8 years. This is not the end of the story, as the situation is expected to deteriorate further into this quarter.

Thankfully, there is some encouraging news as well. For example, there was a sharp improvement in economic activity last month compared to the lows seen in April.

The government of India should work with private companies to boost the local economy. Otherwise, it will take more time to get the economy back on track. Hopefully, the county has the potential to reach this goal.